The High Cost of Using AWWA’s Buried No Longer Pipe Service Life Table for Capital Budgeting

The American Water Works Association (AWWA) published the buried no longer (BNL) report in 2012. This informational and marketing report argues that costs will continue to increase, at more cost to consumers, and documents regional differences. AWWA estimates that $1 trillion is needed over the next 25 years in order to repair these infrastructure systems. The report argues for the development of comprehensive strategic investment plans that will help to reduce costs to consumers while addressing these drastic needs effectively and provides a series of charts documenting the investment needs according to replacement of particular piping systems. As water utilities increased their capacity of developing water asset management plans, many water asset managers began to use the AWWA BNL report’s pipe life data as the replacement date for their pipes. This “borrowing” of the BNL report’s service pipe life numbers have increased the risks and cost of many capital budgets. This paper reviews the BNL report assumptions and pipe service life numbers and provides an improved framework and new strategies to more accurately plan for pipe replacement. The BNL report assumes that utilities will maintain the same number of main breaks that occur per mile of pipe. That is, the study assumes utilities will strive to maintain current levels of service rather than allow increasing water service outages. The BNL report assumed that each utility’s objective is to make these investments at the optimal time for maintaining current service levels and to avoid replacing pipes while the repairs are still cost-effective. With this data in hand and using the assumptions above, the report projected the “typical” useful service life of the pipes in the inventory using the “Nessie Model”. The model embodies pipe failure probability distributions based on many utilities’ current operating experiences, coupled with insights from extensive research and professional experiences with typical pipe conditions at different ages and sizes, according to pipe material. The analysis used seven different types of pipe in three diameters and addressed pipe inventories dating back to 1870. Since 2012, many new models and tools have been developed and water utilities assumptions have changed. This paper will review the basis of the 2012 assumptions and provide an overview of new findings which water asset managers should be aware of when developing their water pipe repair and renewal capital plans.